Saturday, June 23, 2007

Is VoIP Really the Answer?

A couple of years ago many people believed that VoIP was the answer to low cost phone service for average consumers. It was thought to be the ultimate solution combining low cost home phone service with cheap domestic and international long distance. For some it has worked as intended but for others it has not been the ultimate solution. VoIP is still plagued with issues such as reliability, call quality and VoIP blocking.

Are international rates really cheap with VoIP? We reviewed international rates offered by several VoIP service providers and found their rates to be competitive to some locations and extremely expensive to others when compared to high quality prepaid calling products such as phone cards. Take Vonage for example, their international rates to Europe and a few other destinations are competitive while rates to Russia (7 to 12 cents/minute), India (17 cents/minute), Brazil (8-9 cents/minute), Mexico (12 cents/minute), Australia (5 cents/minute) and other destinations are easy to beat. It seems that many people who use VoIP to make international calls care more about convenience than saving money.

Call quality has been another issue with VoIP. Some people have found that the call quality with their VoIP phone system is excellent while others found it so bad that they removed the service and went back to a traditional land line. We use a VoIP phone and have talked with many users about their experience with VoIP. We have found that VoIP call quality seems to vary with between ISP providers, locations called and other factors such as INTERNET traffic. On some days our call quality is crystal clear while on other days the quality is acceptable but not great. We still use VoIP but it is not our primary phone and we rarely use it for international calls.

VoIP phone service is also less reliable than traditional land lines and is not convenient for travelers. A VoIP phone will not work if the INTERNET connection is down and this happens often in some locations. Many companies have touted VoIP as a phone that travels but it is not very practical for most travelers. First, a high speed INTERNET connection is needed to make and receive calls and, secondly, a user would need to travel with a modem and a phone in order to use the service. International Phone Cards are a much more convenient option used by most travelers.

VoIP blocking is also becoming more common. This has happened in the USA where an ISP blocks calls made with a VoIP Phone from a third party or, in some cases, they just degrade call quality. However, the real problem is overseas where countries that still have monopoly, state controlled telephone companies are tired of losing revenue. Take Saudi Arabia for example, Saudi Telecom uses software from USA supplier Narus to block all VoIP calls. It has also been reported that Narus has supplied VoIP blocking technology to Shanghai Telecom Co. in China and others. VoIP blocking has become more common as VoIP Phone Service has become more popular. This trend will likely continue.

For some consumers VoIP is the ultimate phone solution but for most it is one of several solutions for reducing the cost of phone service. We think VoIP is a good option as a second phone if the user already has a high speed INTERNET connection and another, more reliable form of service.

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